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Environmental Stories to Watch in 2011

WRI President Jonathan Lash previews the key environmental issues to watch in 2011.

On January 6th, journalists gathered at the National Press Club for WRI President Jonathan Lash's 8th annual "Stories to Watch" presentation. The briefing previewed key environmental issues that will likely emerge throughout 2011. Our resources from the event, including audio and video, are below.

Energy in a Policy Vacuum: The United States must make a range of energy choices in what is essentially a policy vacuum, given the lack of climate legislation. What decisions will businesses, especially utilities, make? And what role will the EPA play?

Food, Fuel, Water, and Land: Rising demand for biofuels, food, and water will increase pressure at the agricultural-forest frontier. Will this lead to an emerging emphasis on food efficiency and the use of degraded lands, rather than virgin forest, for agricultural expansion?

Electric Vehicles and Mobility: In 2011, a slew of electric cars will hit the U.S. and global markets. How will this transition take place, and what will the environmental benefit actually be? And how will innovations like high speed rail and bus rapid transit help rapidly growing economies like India, China and Brazil tackle their congestion and traffic problems?

International Climate Action - Post COP-16: While there was modest success at the climate talks late last year, the response to climate change is expanding outside the UNFCCC negotiations to become a very significant part of development planning globally. What next steps will China, India, Brazil, and other developing countries take? And how far can the United States go towards meeting its own commitments?

Political/Business Gap on Climate: While many members of the U.S. Congress seem to be increasingly hostile to climate action, companies are putting more emphasis than ever on being green. Why is it that the politics seems to be going one way while corporations and consumers seem to be going another?

Powerpoint Presentation

Audio

Twitter Archive

Transcript

JONATHAN LASH: Thank you all for joining us. It's a pleasure to be with you this January morning.

Before I get started, I did want to just recognize one dear, old friend who's joined us this morning, my friend Dr. Tom Lovejoy. Tom is a world-leading ecologist, and I think has taught more people about the importance of the Amazon than any other five people in the world. Tom, it's really great to have you with us this morning.

So before looking ahead to 2011, it's worth a quick look back at 2010. It was a tough year for the environment and a tough year for environmentalists, especially in the US. You all know that it was probably the hottest year in recorded history. This charts the number of locations that recorded the hottest temperatures ever recorded. It was marked by an enormous range of damages from natural disasters.

This is a story about one insurance company's totaling of the efforts. And many of these disasters were at least in line with what climate scientists are predicting with warming. A hundred-square-mile sheet of ice broke off Greenland early in the year. There was unprecedented heat in Russia and fires all across Siberia, at the same time that much of Pakistan was under water.

And there were a series of tragedies that occurred at the extractive interface where human kind if going in its ever-greater effort to find fossil fuels – the Massey coal mine disaster and, of course, the Deepwater Horizon spill.

But maybe the most important event of the year, from a US environmentalist's point of view, was the failure of Congress to act on global warming legislation. And that really leads directly to the first story I wanted to talk about – the range of energy changes that the nation will be making in what is essentially a policy vacuum.

The energy economy in 2010 was a little less than 10% of the whole US economy by value. And as the US economy recovers and energy demand increases in the US, both companies and energy producers face a range of important choices. Those are especially tough for utilities trying to decide how to make $100 million/billion investments in capital stock that will be functional for 20 to 50 years.

And there are a number of drivers of change that they're trying to respond to. The price of coal is going up, both because of global demand, and now because of the floods in Queensland. The price of gas is dropping; and you all are following the story of the increasing belief that we will see vast supplies of unconventional gas entering the US supply chain. Federal regulation is uncertain; I'll get to that a little later. And there are enormous variations in state regulation of energy production and state policies are shifting.

So the result is enormously difficult choices for utility investors trying to understand what costs will be over the coming decades. What we have seen, because of the slowdown in policy in the US, is we're lagging far behind now in terms of clean energy investments, and the clean energy sector appears to be slowing down. As a result, there's been some withdrawal of funds from clean energy investment funds. And recent reports suggest that the shares of stock in publicly traded clean energy investment funds are falling. There have been cancellations of coal-fired power plants. There have been cancellations of planned new nuclear units.

So 2011 is going to be a year to watch which way all of this goes. And here are some things that you might particularly focus on:

In the next several months, the CEOs or CFOs of utility companies will be doing their outlook briefings for Wall Street investors. In most cases, you are invited to join those calls, and they will talk about their plans. And my guess is, you will hear them talk a lot more about gas and probably wind than you will about coal. In fact, I think you will see a surprising surge of investment in wind, as well as in gas.

You can look at decisions that regulators make about whether they're willing to approve long-term gas supply contracts. Ever since the deregulation of natural gas prices in the US caused a certain amount of chaos in US markets, there have been very few long-term natural gas contracts. Utilities are pushing those again now for obvious reasons.

You can look at whether other states follow Colorado with its Clean Power Act, or North Carolina with its Clean Power Act, both of which have led to conversions of power plants from coal to gas and rising levels of renewables. Or Massachusetts with its new requirements for long-term contracts with renewables producers.

You can look at whether the Federal Energy Regulatory Commission endorses the efforts of those trying to build new transmission lines to get renewable power to the market to distribute those costs broadly across utility customers.

You can look at whether Senator Lugar reintroduces his Energy Efficiency and Clean Power Bill, and whether it has a broad range of Republican sponsors. That would be the clearest indication that there was some possibility of policy initiatives in the current Congress.

And finally, of course, you all are already watching the story at EPA. It's been very much a front-page story in the last few weeks. In the pipeline at EPA are rules dealing with emissions of greenhouse gases, so-called conventional air pollutants, water discharges from power plants, and ash disposal.

In moving ahead with those regulations, EPA is doing the job that was assigned to it by Congress under the Clean Air Act, the Clean Water Act and the Toxic Substances and RCRA, as instructed by a score of outstanding court decisions. This is not an area in which EPA has broad flexibility to move or not to move. In fact, at the current time, the only requirement that has taken effect is not a requirement in a new rule; it is a Best Available Control Technology requirement for large, new facilities that stems directly from the Clean Air Act, not from a new rule.

So as you listen to the debate about the EPA overreaching and the flood of regulation, you have to understand there actually isn't any yet.

This slide gives you a picture of EPA's plans to deal with some of the largest sources of greenhouse gas emissions in the US economy – transportation, electric power and industry. It is the utility sector that will come under these requirements soonest, if EPA moves forward.

And the Best Available Control Technology, or BACT, requirement will be administered by the states, because that authority's delegated by EPA. All of the states have agreed to move forward with that, except Texas.

My colleague, Franz Litz, is sitting back there nodding yes, because he's instructed me on all this. And I think I got it all right, Franz. And if I didn't, he'll correct me. Or answer your more detailed questions.

My view of this is the EPA is doing everything it possibly can to proceed reasonably and pragmatically to answer a set of questions that have to be answered and create huge and very expensive uncertainty that will be an obstacle to economic growth if the questions aren't answered. I mean, I have to put my spin out here; I am an environmentalist and follow this fairly closely.

And there are some companies, including some utilities, that strongly agree. You've seen Exelon and Pacific Gas & Electric out in public, in the Wall Street Journal, talking about these issues. But of course, you know there is a thunderous chorus from much of industry demanding that these regulations be blocked, and it seems a certainty that the House at least will vote a series of different kinds of measures designed to either strip EPA of authority to move ahead, or slow it in moving ahead.

So there is a Congressional Review Act that enables them to take up a resolution to disapprove rules, if rules are promulgated. But none of these rules have been promulgated yet.

There are opportunities in the Continuing Resolution and Appropriations Acts to attach legislation forbidding EPA to move forward. There will be opportunities to attach such legislation to multiple important decisions of the Congress.

I don't know what's going to happen to those when they get to the Senate, if any will get to the White House, and, if they do, what the White House will do. It will surely depend on the context, and everybody's going to be watching that anyway.

So let me just suggest one thing: If six months from now there has not been any significant change in EPA's authority to move ahead, and this is still moving, you should watch for initiatives by the utility industry to get these questions answered, to either get legislation through this Congress or find a way to reach an agreed-upon settlement with the EPA.

So, from energy choices to food, fuel, water and land tensions, which are going to reemerge with a vengeance this year. You remember a few years ago when the story was all about biofuels driving up food prices. We're going to see that story again. This particular issue was sort of an ode to the complexity of reality. The food story is not a simple story.

Food prices are going up. They've been going up for some months now. Farmers are happy. It is not yet having a significant impact politically, but last time around, a few years ago, before the recession, there were food riots all over the world because of the cost of basic commodities. This is in part driven by oil prices going up. There's a close tie between energy and food. But that is by no means the whole story.

We live in a world with a growing population, and global economic growth has been restored. As population grows and the people in the world reach a higher standard of living, the demand for meat grows. As you know, every pound of beef requires many pounds of grain or soy to produce. So as human wellbeing improves, the demand for agricultural products expands.

At the same time, the demand for biofuels, biodiesel and ethanol, corn-based ethanol, is rapidly expanding. That went on right through the economic recession, and is continuing. Those are products produced on the same land, by the same farmers who would otherwise be producing feed and food.

And this tendency is exacerbated by the kinds of climate events that we're seeing all over the world. So floods, droughts, storms disrupt agricultural supplies; that has a significant effect in 2007/2008.

Generally historically, the way we have increased food production as population and wealth increased was to add fertilizer. This is a projection of future fertilizer use: The purple line is what one would expect as business is usual with expected food growth. The dotted line represents a set of policy changes that might somewhat reduce that demand. This is an important factor in a number of agricultural/environmental tensions, which I'll get to in a moment.

The second measure that has been taken to expand agricultural production historically has generally been to add water.

Add fertilizer, add water; you can get more food out of the same piece of land. So what you see here is very little increase in total land under cultivation while we've had a massive increase in actual food production.

But we may be seeing that change.

So issue number one coming out of this, we already have high levels of surface water pollution, high enough to be significantly destructive of productivity and at high economic cost across the world, largely from agricultural nutrients.

And we're also seeing conflicts over water availability growing worldwide. The number of people subject to water scarcity – having on the average less water than is deemed necessary for basic survival – has doubled in the last 20 years.

All of that, I think, is going to lead to significant new land use conflicts. Just at the point where we have an agreement coming out of Cancun on forest preservation, we're going to see increased pressure at the agricultural forest frontier.

In Indonesia, for example, there's just a sharp rise in very profitable palm oil production, which is both for food and for biodiesel. In Brazil, there's a sharp rise in both cattle and soy production; again, pushing on the Amazon frontier.

This will be a year in which the commitments of countries like Brazil and Indonesia to reduce deforestation come up against the pressures created by the demand for biofuels for meat and for food. And I think that you can look for increased pressure on both the companies that produce biofuels – for instance, palm oil producers, who are already responding to pressures to make their activities more sustainable – and increased pressures on food producers, particularly meat importers, to find ways to produce at the frontier without destruction of forests.

So Tom could tell us more about this, but there have been some significant agreements by some of the major multinational companies who are meat producers in Brazil to stay away from the use of land that has been just cut from the forest.

There's one other very interesting new factor here. You know how in the 1970s, as energy prices went up, there began to be an emphasis on energy efficiency. And we've had a sort of 40-year discussion about how much you could get the same services for less energy. It's still going on; it's still the best opportunity.

Well, the same is true of food. The estimates for the United States, I think, are that 40% of food is wasted. I think we're going to see an emerging emphasis on food efficiency. And I think we're going to see an emerging emphasis on the use of degraded lands, rather than virgin forest, for agricultural expansion, which will reflect new technology. There's about a billion acres of degraded forestland that would be used for agriculture to protect the Amazon and the Indonesian forests.

Energy choices, energy fuel, water, land choices. The next is about mobility. I love this story.

During 2011, something like 20 to 25 new all-electric vehicles or plug-in electric hybrid vehicles are going to hit the US market. GE, Hertz, Enterprise, numerous companies and the Government Services Agency have all announced in advance that they will make very large-scale fleet purchases of EVs during the coming year. GE has committed to 25,000 EVs; basically, their whole sales force will be driving electric vehicles.

And Americans are going to have their first large-scale experience with what many people think will be the car of the future, and will encounter some important issues. For instance, because there haven't been electric vehicles, we don't have high-speed charging stations at every service station yet. So there'll be real issues as people begin to demand that the transition is made so that they can use their new Leaf or their new Coda as they please.

We will get to see whether people are concerned that the range for existing pure electric vehicles is limited, or whether in fact most of us spend most of our time driving short distances, and people are looking for an electric vehicle to serve that need. That will drive the shift between a plug-in hybrid and a pure electric.

As you see from the prices on these cars, they all cost close to twice what an equivalent internal combustion-driven car would cost. We'll see whether consumers decide that the annual savings and the other benefits of these vehicles are sufficient to make it worth purchasing them, and how quickly the fleet purchases drive down the prices.

So if you were to drive one of these vehicles at current gasoline prices, you'd – depending on your driving habits, obviously – save something close to $1,000 a year. You wouldn't pay yourself back for the difference in cost, not at current gasoline prices, not at these purchase prices. But you'd get a significant benefit.

There also are interesting questions about the degree of environmental benefit from shifting to electric vehicles. If you drive an electric vehicle in an area, most of whose electricity comes from coal, you get about a 25% reduction in CO2 emissions. If the mix goes to gas, you'll get much higher reductions in CO2 emissions. That's going to be an important challenge for you as policymakers; for instance, as EPA makes the decision about how it's trying to shift the US fleet in the future.

So the advent of electric vehicles is one issue. It will also be a global issue. The Chinese are trying to put a million of these on the road in the next couple of years. They have subsidies for buyers that are much larger than US subsidies, as does Europe.

But the other, second issue about mobility can't be solved by electric vehicles. Congestion is the same whether your car burns gasoline or runs off a battery. Safety issues are the same whatever kind of vehicle. And for rapidly growing economies like India, China and Brazil, this is becoming an issue of intense importance.

China has made a very interesting call on this. Their intercity air transit is already totally jammed, and the demand for mobility is steadily rising. In 2011, or more probably in 2012, China will reach the point, after four years of working on a high-speed rail, where they have more miles of high-speed rail in China than all the rest of the world combined. They are going to invest $120 billion in the next two years. The trains are now traveling at over 200 miles an hour, and within another year or two will be traveling at over 300 miles an hour, thereby completely eliminating all the benefits of air travel for less than a 1,000-mile trip.

These are spectacular new technologies. And a key issue that's emerging here is the Chinese are making such a massive investment that they're going to dominate the technology in this, and they will be the world's suppliers of high-speed rail. While they're investing over $120 billion, we're mostly canceling the plans that had been made for high-speed rail and investing a few billion dollars out the stimulus.

So this is intercity transit. There's also the question of within-city transportation. I don't know if you get to travel very much in developing country megacities, but movement is a major challenge. In Washington, you can schedule six meetings a day and actually imagine that you could do it. In Sao Paulo or Mumbai, two is the absolute maximum, because it's so difficult to move around.

I just wanted to talk about one trend and brag a little bit. This is my one advertisement for WRI. We have a Sustainable Transport Center that has been a catalyst for the development of what I see as a solution that's just going to explode in the coming years – rapid transit buses traveling on dedicated lanes on a schedule, moving huge numbers of people. We are a think tank. We're an analytical organization, but this little Center has already moved over a billion of people, saving them 350 million hours of transit time and avoiding huge amounts of pollution.

Bus rapid transit is cheap. It can be implemented fast. And we're going to see it expanding rapidly because developing country megacities just need to do something immediately, the jam is so bad.

That is particularly going to be true of Brazil. Brazil is glad to be the host for the Rio Plus 20 meetings in 2012, the World Cup, and the Olympics; the World Cup in multiple venues.

It is absolutely essentially that Brazil solve transportation problems in order to entertain those events. The last time I headed for the airport from downtown Sao Paulo, the trip, which is less than 17 miles, took close to three hours.

And Brazil, in fact, has a massive investment plan under way. This will be an interesting challenge for the new president Dilma, a huge infrastructure challenge. They plan to build 500 kilometers of bus rapid transit, 27 kilometers of light rail, 48 kilometers of monorail, and a high-speed rail link between Rio and Sao Paulo in the next two years.

Will it happen, Tom? If you were under the illusion that China might be moving quickly, and maybe India, but Brazil wasn't, it's wrong. There's just going to be an explosion of change around all of this. And transit is going to be a symbol of it as they develop these new facilities.

So 2010 ended with an environmental success, a modest one, the agreement in Cancun. I wanted to talk a little bit about a couple things to look for coming out of the Cancun meetings, and then say why I actually think that's not where the action is.

I refer to Cancun as "Copencun", because I think that it essentially finished the business that was done at Copenhagen. The world accepted what was done at Copenhagen and ratified it in Cancun. The targets that had been included in the Copenhagen Declaration were legitimized in an agreement at Cancun. They've become part of the Framework Convention, and the follow-up on those targets will be under the Framework Convention.

There was an agreement about transparency and reporting that was a very important step forward. There was an agreement about funding. There was an agreement about forests. If anybody has questions, we can talk more about this, but you all covered it a month, so I'm not going to spend a lot of time on it.

It was very important not to fail in Cancun. A failure could have obstructed action. But the success isn't going to drive action. It's the other way around; the action drove the success. The action is at the national level and the sectoral level.

So some things to look for. Well, I've listed some of the decisions that still need to be made following up on Cancun, but I think the bigger things are not up on that.

First, there's the question of whether Europe decides to up its target from 20% to 30% reduction. That issue is very much alive and will be resolved soon in a difficult time for Europe economically.

But much more interesting is what's happening in China, India, Brazil, and in fact in the poorest countries in the world. China's 12th Five-Year Plan is full of powerful commitments for reduced carbon intensity, improved energy efficiency, changed technologies. They will reduce by six billion tons from business as usual.

They have not only massive renewables investment, they have a very strong renewables law that requires utilities to buy clean energy, which they are enforcing. I talked about their investment in high-speed rail. They're making massive investments in smart grids so they can move their renewable power around the country.

They have a huge building energy efficiency plan, which will be expanded in the 12th Five-Year Plan. They've made a commitment at the regional and local level to greater transparency, so the government can better track compliance with the 12th Five-Year Plan, which is quite remarkable in a society which doesn't make data publicly available. And the Party Congress was full of clear commitments to reduce carbon intensity.

What's said in Congress here isn't necessarily a way to tell what the future of the country is, but the dialogue in the Chinese Communist Party Congress is much more controlled. And when the country that has, for 20 years, put absolute, total emphasis on growth and development begins to talk about a kind of growth, low carbon growth, it's a very significant shift.

India was an interesting player at Cancun, some people would say rescued the Cancun Agreement by advocating the notion that developing, as well as developed, countries should make commitments. But that reflects what India is doing domestically. India has adopted a coal tax. The funds are being used to be part of a 20-gigawatt commitment to renewables. They have an energy efficiency trading scheme; essentially a cap and trade scheme, and set of other clean energy incentives.

I talked a little bit about Brazil. Dilma, in her inaugural address, committed to continuing the strong environmental policies and climate commitments of her predecessor, a very interesting move for someone who was perceived as not very interested in the green agenda. This is a very strongly populist politician who had been one of the advocates against the green agenda within the previous administration. But you'll recall in the elections, the Green Party candidate got 20% of the vote. And I think that got the president's attention.

Brazil is the only developing country that's made a commitment to an absolute cap, 2.1 billion tons per year. They have a large-scale energy efficiency program. They have the best biofuels program in the world, sugar cane ethanol. There will be breakthroughs probably in this year in terms of the capacity to produce ethanol from sugar cane, improved sugar cane.

Sao Paulo's state, which is 30% of the Brazilian economy, has a statute that was enacted last year based on the California commitment, which commits them to major reductions in technology shifts. In fact, the company Johnson Controls, which sells a lot of energy efficiency materials, did a worldwide survey and found business executives outside the United States, in the developing world, twice as likely to say they would make major investments in energy efficiency in the next year as those in the US.

Okay, that's China, India and Brazil. One more observation about this. Every five years, the World Bank's client countries submit development strategies. In 2005, those countries submitted their development strategies and 15% of them mentioned climate change. In 2010, they submitted the strategies and 81% put climate change as one of the top three priorities.

This is an issue that has moved outside the negotiations among environment ministers to become a very significant part of development planning globally. Those countries, those poorest countries, are in fact where some of the most rapid economic growth is taking place, and they see it as a necessity to deal with climate issues.

Which brings us to the other outstanding issue to watch about the follow-up on Cancun, the one country that everybody thinks probably will not meet its commitments, the US. WRI did a study – Some of you have seen it. Are there copies in the back? There are copies in the back, yes – of all of the existing authorities that the federal government and state governments have to reduce emissions over the next ten years, and how much could be achieved under those.

I'm not going to go into a detailed discussion. Franz is one of the authors of that study. He'd be happy to talk to anybody who'd like more information. I would just point out, how far we get with that depends not only on whether the Congress tries to block EPA action, but how far the Administration decides to go, because it's not just about EPA. It's about EPA, the Department of Energy, the Department of Transportation, the Department of Agriculture.

If there is a government-wide push to meet the President's 17% commitment, which was reiterated by our negotiators in Cancun, it is possible to do that. If there is not a government-wide push, the US will be one of the countries that does not fulfill its commitments.

One last set of comments. This is really a perplexity. It's a question to watch. It's absolutely clear that the rhetoric in the 2008 (sic) Congressional elections was pretty anti-environmental, and especially anti-climate and anti-cap and trade. That's the received wisdom out of the election.

But we're seeing companies pumping money into green advertising. There was one just this morning, I found it in my Times. This is a Panasonic ad. So what's going on here? This is GE; GE's been at it for six years now, with ecoimagination. Caterpillar. Nike. Why is that the politics is going one way and the corporate advertising and the corporate commitments are going another?

I've asked a number of business executives, and it is certainly clear that they continue to get in their consumer surveys strong indications that their customers care about whether the company is environmentally sensitive and whether the products are environmentally preferable. Not necessarily that they'll spend twice as much, but they care. So companies are investing real money in positioning themselves as green.

Secondly, I think there's another phenomenon, and I'll end with this. There are a number of companies we've worked with over the last five years who are very strong advocates of the need for energy policy and greenhouse gas reduction. And they're looking up and they're saying, "The government should have done this. We thought the government was going to do this. It isn't going to. Now we have to figure out what we're going to do on our own."

That's something to watch: What do they do in the coming year? Not in terms of policy, not what do they advocate in Washington, but what do they actually do in the coming year?

Thank you all very much. Let's go to questions. Yes?

ED FELKER: Hi, I'm Ed Felker with Energy/Guardian. Could you talk about the future of the Climate Action Partnership? Do they have a role in this town anymore? Or is it more a state and, as you say, an individual company issue?

JONATHAN LASH: The United States Climate Action Partnership was formed four years ago by a set of companies and environmental groups who coalesced around the notion that it was essential that the US enact economy-wide, mandatory legislation to reduce greenhouse gases, and ultimately agreed that cap and trade was the right way to proceed.

We were very actively engaged in the debates in 2008/2009/2010. Obviously, the legislation didn't pass, and it's not going to pass this year, or next year.

USCAP met recently. The members have agreed that they continue to be committed to that set of principles, the notion that we need mandatory, economy-wide legislation to move ahead, not only for environmental reasons, but, much more importantly, for competitiveness and economic reasons, that the kind of partnership we have can be useful, and we've agreed to keep USCAP in existence for the time being and reassess what's going to be possible.

ZULIMA PALACIO: Zulima Palacio, Voice of America Television. I wonder if you left, I think, an important factor to watch around the world, which is called population, did you leave it out on purpose? Because I think it's quite important. How do you see the factor of population playing a role here?

JONATHAN LASH: So I did mention it in terms of the food/fuel/land/water issue. It's a fundamental driver. I didn't talk about it because I don't see a particular story to watch about it in the current year. Of course, the expansion of population, with the expansion of economies is what creates the demands that cause the problems that environmentalists try to address. But I didn't see the hook for this particular year around that issue.

JEFF JOHNSON: Jeff Johnson, with Chemical Engineering News. You mentioned earlier, when you were talking about Congress, you said if Congress didn't come up with some sort of an action dealing with climate change over the next six months, utilities were going to – I guess that's what you meant – were going to ask for that. I'm just kind of curious, if you would elaborate a little bit on that.

But also, are there other areas that, despite the posturing that's going on now in the House and inaction, confusion on the part of the Senate right now, what other issues like that might come to the fore, despite the fights in Congress?

JONATHAN LASH: So what I said was, after the question of whether Congress is going to block EPA action plays out, and people have a clearer idea of where we're going, if there hasn't been a significant change, utilities have an urgent need for certainty. They need answers to the question of, what's the future cost of CO2 emissions, what are the regulations going to be for conventional pollutants, and so forth, and therefore, have an interest in having Congress address that question. I wouldn't say that's highly probable, but I think it's something to watch for. I know that there have been discussions of under what circumstances they might seek legislation.

Your broader question, I do think there is a possibility, not a large one, that a bill like the one Senator Lugar introduced in the last Congress might move, that deals with a broad range of energy efficiency issues. There's huge potential for economic savings with energy efficiency investments, and the number of structural obstacles to that taking place. So I could imagine a debate on that issue.

I know there are a number of advocates for some kind of clean energy standard that would either create incentives for, or require a percent of electricity come from non-carbon sources. I think that's a more difficult possibility at the current time. But the most likely outcome is nothing.

LISA FRIEDMAN: Hi, I'm Lisa Friedman from ClimateWire. I have a question on the international stuff. When we came back from Copenhagen last year, there was a lot of talk, and at your beginning-of-the-year talk as well, about the C5, about Brazil, India, China, South Africa, the basic group, and how they acted as a negotiating force. And I'm wondering, outside of the individual actions that are happening in some of the countries that you talked about, how did you see this group play out as a negotiating group on the global stage since Copenhagen and going forward? Are they still the force to be reckoned with that you kind of described this time last year?

JONATHAN LASH: Let me make a couple of comments and then ask Jennifer to add something.

First, I think it is remarkable that the outcome tracked as closely to what the US was hoping for as it did. Todd Stern and Jonathan Pershing played a hand of ones and twos, and managed to win pretty big. They should really be congratulated for that.

But that was possible because of the rule that China, India, Brazil, in particular, played. China appears to have come to Cancun – I hope you will correct me; Jennifer was there, I was not – but they appear to have come determined not to be blamed for a failure. Jairam Ramesh came prepared to take significant risks to create success. Brazil was very interested in keeping this issue moving. And I think those three made a huge difference in what was possible.

Jennifer, anything to add?

JENNIFER MORGAN: I would agree with that. I think the additional factor that occurred over the year though was, with those actors, the C5 moving, and then the Cartagena Dialogue, which was a group of smaller developing countries – Colombia, Costa Rica, even small island nations – working with Europe, and Australia – which is another country to watch, because they're going to be maybe putting their target up a bit more as well – to create a coalition of the willing, so to speak, within the negotiations, to basically operationalize the Copenhagen Accord.

JONATHAN LASH: I haven't been looking over to this side. Further questions? All the way in the back.

KATE SHEPPARD: Kate Sheppard from Mother Jones Magazine. Also going back to the international front, how much of an issue, do you think, Cancun, Kyoto continue to be a huge issue, they didn't really answer that question, they pushed it off till next year, it's not going to get any easier? How much of an issue is that going to be going forward in the international conversation? The US role it would be interesting to draw upon as well since they keep saying, "We had nothing to do with Kyoto," which is clearly not the case.

JENNIFER MORGAN: Jennifer Morgan. I think it's going to continue. The Kyoto Protocol and the future of it is going to continue to be a major issue in the negotiations. But I think things have gotten much harder, rather than easier. And I think if you watch the developments of what is occurring in Japan and Russia and their stances on it in Cancun, you see that the will is not building; it's rather receding on the Kyoto side.

I think that the real question looks to both Europe and Australia as two major kind of players in that, to see if they want to continue. But it'll continue to be a conflict moving forward.

JONATHAN LASH: An unresolved issue.

ALAN SCHLAIFER: Alan Schlaifer with the Wharton Club Green Business Summit. One of the areas that you haven't dealt with that might have a tremendous impact in reducing pollution, congestion, energy use is telework in the United States and abroad. What do you see as the potential? How can it best made to be consistent with workplace needs now and in the future?

JONATHAN LASH: I'm not an expert, but I do see companies increasingly adopting flexible telework policies, in part because it just is so difficult for their workforces to live close to where they end up. They travel so much, so flexibility adds to productivity.

We certainly, WRI increasingly uses that. And as organizations are globalized, it's inevitable that you rely on different forms of communication anyway.

But in terms of the numbers, I haven't tracked the numbers. Maybe you have, and I don't know whether that's becoming a significant factor in reducing vehicle-miles-traveled. There's nothing that reduces emissions faster in the US than reducing vehicle-miles-traveled.

RAPHAEL ISAAC: Raphael Isaac. I'm an independent consultant in transportation and energy issues. I have just a couple quick questions. You talked a lot about BRT becoming more common and having a strong role in developing countries' megacities. I'm wondering what you see, if you see that potentially happening here in the US, or if you see potential obstacles to BRT. That's my first question.

My second question was, there was an interesting article in the Wall Street Journal, I think in November, some policy folks over in California, and they were saying that, at least in the US, one issue is that maybe the government, both at the federal and state levels, is investing primarily in the current technologies and incentives for companies to build on those, and not enough on research for improving the technologies so that the technologies can become less dependent on these incentives. I'm wondering kind of what your, if any, input on how you feel about that.

JONATHAN LASH: Let me respond to the second question, and I have two of my colleagues from EMBARQ sitting right behind you, who I'll ask to respond to the first.

That's why carbon price would be a great measure, whether through the direct imposition of a price, or through cap and trade, because then it leaves it up to investors to decide which technologies are going to provide the best opportunity to reduce carbon in the future.

I actually think the investments that were part of the Stimulus Bill were pretty well distributed between current development and future investment in future technologies. But there are some problems that need to be solved now, like the grid. We have a grid that just won't support full clean energy development, and it's important to invest in changing it.

Aileen or Marissa, do you want to–? Introduce yourself first and then–

AILEEN CARRIGAN: My name is Aileen Carrigan and I'm a transportation planner with EMBARQ, which is the sustainable transportation group at WRI.

It's a great question about BRT in the US. Most of EMBARQ's work is outside of the US, and we've been involved in a lot of the successful BRT projects in South America, and increasingly in Asia. And it's a question we get a lot – is it feasible to implement BRT in the US? And I think that there have been some successes already. New York City's just opened a rapid, we could say BRT-lite system in New York City. LA has the Silver Line [Orange Line]. Cleveland has the Healthline. So there are smaller-scale BRT systems already.

I think there will continue to be a dialogue here in the US. I think one of the challenges is getting the US audience to understand the full benefits of BRT, and that it's possible to move a high capacity of passengers with a bus-based system, as opposed to a rail system.

The most famous system in Bogota moves 1.6 million passengers a day. Whereas, I believe Washington's Metro moves just over a million passengers a day. So it's very possible to move those volumes of people with buses.

And I think the critical question is not BRT versus a rail system. I think where cities are short on capital funds, it becomes BRT versus no transport investment at all.

So I think those are important questions and difficult questions that the US is facing. But there is some movement in that area now.

JONATHAN LASH: I have to say, I was not a BRT believer when we started working on this. And one of the first projects we got involved with is Avenida de los Insurgentes in Mexico City, which is one the longest, largest avenues in any major city in the world.

The notion that you were going to clear traffic out of two lanes of Avenida de los Insurgentes and move scheduled buses up and down it just seemed far-fetched to me. But it's running. It's moving, how many passengers a day, Aileen, do you know?

AILEEN CARRIGAN: 450,000 passengers. [Note: this is the number of passengers Mexico's entire BRT system moves per day.]

JONATHAN LASH: And these are people who were spending four hours getting to and from work, and how it's a half-hour trip. And it costs a tiny fraction of what a subway costs, can be built in a tiny fraction of the time, which is why I've become a believer. It's a solution that mayors can implement during their term.

I'll take two more questions.

CATHY CASH: Cathy Cash with Platts Electricity Publications. Just revisiting the potential for action on Capitol Hill, if Congress is, as expected, unlikely to act on climate legislation for the next couple years, and they also do not get the support to block EPA going forward on regulations, can EPA give the power sector the certainty it needs on carbon prices?

JONATHAN LASH: This is the question I've been waiting to toss to Franz, who is an expert. I think that's exactly what EPA's going about doing. The question is, can they do it in an adequately flexible way. And do you want to talk about that, Franz?

FRANZ LITZ: Sure, happy to. The administrator of EPA has said what she'd like to do, and not just in the power sector, but in sector by sector, is attempt to create that kind of certainty. And so, early this year, we will have, by mid-spring, new, what are called map[?] standards, toxics from power plants. We have new regulations for conventional pollutants affecting power plants. And so, part of that regulatory certainty angle is to address all of the various regulatory burdens that the power sector will face together.

I think Jonathan's point that you might see utilities come back to Congress is a good one, because it's not as clean and neat and simple as you might get from Congressional action. And so, that's a key issue to watch.

And the role of states is a key issue, because the Clean Air Act, in particular, is a state/federal balancing and partnership. And so, there's necessarily in that mix some differences across the states. Which, of course, if you're a utility that operates across multiple states, you'd rather see uniformity nationwide. Which is one of the reasons why Jonathan's point about watching utilities to see if they'll [1:02:28] to ask for uniformity is very much on point.

MARC GUNTHER: I have sort of a nitpicky question and then a general one. The nitpicky one is, on your slide about projected emissions under different scenarios, I see a gap between what you call the go-getter scenario and the 17% reduction. And I thought you had said if the government acts aggressively, you could get to the 17%.

JONATHAN LASH: I was hoping nobody was going to notice that, but I can answer the question.

MARC GUNTHER: Okay, and it relates to the second questions, which is, on your most optimistic day, what is the path that you see to getting emissions reductions that scientists say would be prudent? Like what's your best case scenario for getting to where we need to go?

JONATHAN LASH: I want to get to the chart first. There it is. What we looked at were existing authorities on which there is clear peer-reviewed data on what kind of reductions you can get. So there were a lot of things that we didn't even look at to get this scenario.

We didn't look at what the Department of Agriculture or Interior could do with land use, because we didn't have peer-reviewed data, so there was just no way to give you a legitimate estimate. But if they push hard, they can make a significant different there. That's why I believe that extra 3% could be achieved.

But your other, bigger question, that's one we obviously agonize about all the time, because the science says that we should be doing way more than what was agreed to in Copenhagen, and then essentially legitimized in Cancun.

And my premise has always been that once we begin the process of decarbonization, there will be business and economic incentives that essentially create a competition among countries to be the producers of those technologies. And that competition will start what is essentially an avalanche of a shift. So it'll go much faster than required, driven by factors other than policy. But policy is necessary is to get it started.

So I think one of the most interesting phenomena is China is moving so far into the lead in competition a number of clean energy technologies that we don't have to worry as much about whether they'll really keep their commitments because they have a commercial drive to do it. This is what they're selling to the world.

I think that phenomena can happen more broadly. And frankly, it's the reluctance of the US that's the biggest restraint right now.